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Turn an ethical question into an asset!
I suppose you have already experienced the thrill of a jeep safari as I did in the Algarve, Portugal.
Unfortunately, during this safari you are not able to see the BIG 5 like in Africa. Instead, you can learn an
awful lot about green logistics of oranges. After driving a while, enjoying nature, tasting local specialties, you
sometimes need to find some sugar to raise your energy levels. In the Algarve this is really easy: you will find
oranges everywhere (in the right season) lying on the ground untouched. The interesting guide which came
with the safari package remarked that I was extremely lucky. It happened that this the only way to eat
Portuguese oranges in Portugal. I was surprised! You too?! How is this possible?
today
Most oranges in Portuguese supermarkets and groceries are imported from Turkey. The costs of
producing and transporting them to Portugal from Turkey are far lower than doing the same for the
Portuguese oranges. Fruit farmers in Portugal do not see a way to compete with the imported oranges
because of the low price offerings of Turkish oranges. That is why they fall on the ground and nobody cares
about these oranges, except we of course! Not really a green logistic network you might say!
today
Suppose you are the CEO of a large international orange producer and distributor. What would you decide?
Do nothing or act now?!
today
If the temperature increase will rise above this threshold, the world we live in will change forever…
future
Just take a look at the most intriguing number: 1.5 billion; the number of lives that are in danger if
temperature increases with more than 2° C. For most countries in the industrialized world such a
temperature rise will seem pleasant because these countries are situated in an average climate, but
remember the following. It is our problem too. First of all, it is during the industrialization, while
economically a good thing, has caused the temperature rise. Secondly, it also a problem for the people
living in the industrialized world. Where do 1.5 billion people - who are not able to find enough water in
their country - have to live?
future
Maybe in this European city? Do you have an idea which city it is?
future
YES, you are right: COPENHAGEN!!! Why is this amazing city so important?
future
The European Union (EU) wants to tax carbon emissions much more severe. The EU has not stipulated such
severe measures yet, because of the fear that the EU will loose their competitive advantage vis-à-vis the
USA and China. The latter countries have not formally committed to a considerable reduction of carbon
emissions. The expectation is that Copenhagen will serve as the basis for a joint commitment (EU, United
States, China, etc) to make the reduction of carbon emissions reality. When (not if) this is the case, EU will
surely tax carbon emissions to a point that citizens, business and governments will alter their behavior to a
more carbon friendly way of living. From that point on, reduction of carbon emissions is not only an ethical
question, but something which is clearly visible in the balance sheet. Companies who produce and
transport more eco-friendly will have a competitive advantage.
future
What has your company already done to reduce carbon emissions? Has it already introduced new eco-
friendly technologies? Has the company trained its employees to drive more efficiently? A driving course
can improve the efficiency up to 30%. Does your company assess logistic network improvement
possibilities through green glasses?
what to do
An international courier express company manages a logistic network to bring laptops produced in China to
Europe. The laptops are seen as a very fast moving product as a consequence of rapid technology advances
and corresponding price strategies. A laptop is almost ancient history by the time it arrives. To this end, the
focus lies primarily on air freight. What would the results be if the focus shifted to sea transport. After
solving this new logistics puzzle, the reduction in terms of costs and carbon emissions is amazing. There is
one catch, more sea freight means a prolonged lead time. This adds a important balancing exercise: how do
you outweigh the expected loss in sales due to lowering service and the reduction in costs carbon
emissions?
what to do
NO, this is proofed by the next case.
In practice, we have encountered the next remarkable example. Two companies in the fast moving
consumer goods sector are situated in the same industrial zone practically lying next to each other. On top
of that, these companies deliver every week more than 50% of their combined volume to the same
customer but in separate trucks. Do you know what the improvement potential is of this supply flow when
both companies would work together? Without sacrificing their service levels….
A striking estimated reduction of 40%…
what to do
But also even more striking…
what to do
Let’s get back to our internationally recognized orange producer. What will you do now if you were in the
shoes of the CEO?
Do nothing or act?!
what to do
what to do
John PoppelaarsPrincipal Consultant
mail [email protected]
Patrick SchittekatPhD Researcher
mail [email protected]
skype patrick.schittekat
Visit John’s blog OR @ Work for more details:
http://john-poppelaars.blogspot.com/
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